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Can the financial sector really thrive on social media?

The strictly regulated financial services industry has, in the past, shied away from social media engagement.

Common objections, even a year ago, were: people don’t want to talk to their bank, it’s too risky, too expensive or not relevant. But despite a slow start, things are starting to change.

It turns out that people do want to talk to their banks - specifically younger customers.

Recent research by Sitel, reported on Econsultancy, shows that 15% of 16-24 year-olds choose to interact with customer service on Twitter, Facebook, blogs and forums.

first direct has been particularly innovative within social media, providing people with a way to connect with each other and recommend places to go (via the Little Black Book).

Plus, the brand has shown that it’s listening by launching first direct Live which shows the online feedback that the brand is getting. These initiatives, in addition to its social media news room, have given the brand a great advantage without contravening any regulations.

HSBC (which is a client) is also very active on social media. Its 2011 Facebook competition invited students to submit a video of how they planned to make their mark on the world, using a combination of user votes and a judging panel to select eight winners to receive a £15,000 bursary.

This is a great example of a bank using social media to attract young audiences, and put something back into the community. The campaign attracted a reported 40,000 votes.

Then there’s Aviva, which has created a character that saved money on his car insurance so that he could spend more on fishing. Facebook fans can play games, create songs and get a first look at the next advert.

Aviva also have the Magic Money campaign to promote pensions (not just its own offering, but pensions in general).

So, financial brands can benefit from using social media, as long as they abide by FSA regulations while doing so. There are a few best practice rules to follow along the way.

1. Financial brands need to define social media strategy and create a rigorous set of guidelines prior to introducing the brand to social media.

The organisation should ensure that all employees are aware of the guidelines and that they are fully trained in social media use. Even employees that are not directly responsible for maintaining the brand's social media presences need to be trained regularly to avoid potential damage to reputation and avoid operating outside of regulations.

2. There needs to be a clearly defined escalation process in place.

What, for example, would the social media team do if the official Twitter account received threatening tweets targeting a specific branch or employee? What would they do if the brand's Facebook page came under a coordinated attack by a pressure group?

3. The organisation must let people know what to expect from the brand over social media.

Ideally, issues should be responded to on the channel that the customer or follower posts them to, but this may not always be appropriate for financial brands. If expectations are set early on in the process people are likely to be much more understanding of this.

4. It’s important for the brand to be consistent in applying community rules.

The rules should be part of the employee guidelines and clearly set out somewhere on the social media profile or community forum in question. The consequences of rule breaking must be visible to the community and constantly policed so that all commenters are treated fairly.

5. Financial brands need to remember that social media is all about talking with people not at them, but creating engaging content that makes people want to return to your page (rather than just ‘like’ or follow the brand and never interact with it again).

Only establish a social media presence if the brand is culturally open enough to take criticism without resorting to draconian responses, like deleting Facebook comments that are simple criticisms or complaints.

However, the page or community should be properly moderated and managed to protect users and the brand reputation alike.

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